An agreement between the Indonesian Bank Restructuring Agency and the
Salim group appears to be a major breakthrough in government efforts to
recover debts from delinquent bankers. The group said it will settle its
48 trillion rupiah ($4.4 billion) debt to the government by surrendering
significant stakes in more than 100 companies to Ibra. But who gains the
most?

It could be Salim. "Anthony Salim comes out looking real good
because
he is seen to be settling obligations sincerely and acknowledging the
new reality," says the head of research at a Jakarta-based brokerage.
The group will continue to manage and share in any future profits of its
key listed companies -- Indofood, Indocement and Indomobil -- all of
which have large debt. "This is a public-relations exercise," says a
Singapore-based analyst with a European brokerage.

Ibra insists it played tough, pointing out that its negotiators
shaved 40%-60% off Salim's claimed value of the shares. But scepticism
persists because the agency hasn't made the valuations public. Ibra
needs cash because it gave billions of dollars to 14 banks nationalized
or suspended so far this year. It has recovered 177 trillion rupiah from
the banks' owners -- but only 1 trillion rupiah is in cash; the rest is
in shares and property, some with dubious valuation. A Jakarta-based
banker says preparing the companies for sale to raise cash should take
about a year. But a government official has announced an auction on
October 8 -- raising doubts about the transparency of the process.